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FinTech Talks: ...

There are no secrets that time

does not reveal (By Ian Salmon,
Accedian)
French dramatist Jean Racines point seems particularly
relevant in todays nancial markets. A view of time has
become increasingly valuable but not easy to achieve,...
March 2, 2016

French dramatist Jean Racines point seems particularly relevant in

todays nancial markets. A view of time has become increasingly
valuable but not easy to achieve, writes Ian Salmon, Market Consultant
at Accedian.
Banks and other nancial institutions have endured extreme adversity
in recent weeks, brought on by unprecedented levels of market
volatility. Now is perhaps a more apt time than ever to ensure optimal
protability, manage risk and strive for better-informed business
decisions. The ability to thrive while minimising the cost of operations,
and in the face of such adverse market conditions, will require
signicant agility.
Banks had already begun their review of processes as they continued
to focus on eciency and client service. Some have consolidated
business lines as a result however, in doing so, they must rationalise
individual service-specic infrastructures. They must also nd a way to
deliver a complete view of everything across those infrastructures so
theyre equipped to make smarter decisions.
Regulation has also become a major driver for change. Regulators are
demanding that rms deliver a holistic view and a key part of this is
the MiFID II requirement for all data to have a universal timestamp.
Whats interesting is that the regulators motives for doing this, to
reconstruct sequences of events to gain intelligence on the market, are
closely aligned with what rms need to be thinking about internally
understanding business activities in order to hone strategies.
This elephant in the room, compliance, could be the imperative that
rms need to rethink approaches once and for all. And with market
participants and regulators pushing in the same direction, its time for a

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radical shift. That means turning attentions to

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Ian Salmon, Accedian

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Running multiple infrastructures can be costly and challenging.

Furthermore, this plethora of applications inevitably use dierent data
structures and timestamps, which means they all present a separate
unsynchronised version of events in diering formats. As a result, it
becomes almost impossible to piece everything together into a
sequential unied view of all data, which adopts a universal format,
across all asset classes and in real-time.
A strategic approach to compliance
When dealing with regulations, all too often, rms have focused on
addressing each regulatory requirement individually or theyve dealt
with a specic piece of the architecture in isolation. These tactical
approaches are now proving ineective, particularly given the scale of
the challenge ahead.
MiFID II is a case in point and most in the industry that have lived
through previous major regulatory change appreciate the potential for
market structure impact.
Few predicted the amount of transformation that would result from
MiFID I and MiFID II promises to up the stakes dramatically.
To address the enormity of the issue, rms are moving to a holistic
approach; one that recognises the common regulatory requirements
and addresses them as a whole; and, crucially, one that broadens the
horizons beyond immediate regulations to achieve enterprise-wide

EVENT PHOTOS

commercial gains.
Timestamping a watershed moment
The MiFID II timestamping requirement is an important catalyst for this
widespread change. Many rms have invested in data cleanliness and
have integrated with data repositories to house the information
already. But thats simply not enough going forward.
Timestamping creates a common fabric that brings together a whole
set of worlds that were historically never linked. Its a particularly
dicult requirement to address because of the granularity required and
because timestamping needs to happen at every link in the chain.
Extracting data from each application and then analysing it simply isnt

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going to work. However, if rms have a way to grab the data o the
wire, already timestamped, they will be able to construct a holistic view

the buzz and hype and drilled down to

far more easily.

driving eciency and innovation in nancial

whats really important: how is ntech

services?

Firms will be able to comply with regulation as well as achieve

important business gains. Get this right and its a crucial turning point.
Driving protability
One possibility is that it would allow institutions to look at trading
behaviours in a whole new way and with far greater control. They will
be able to analyse proles of trading and identify protable and nonprotable clients and business lines for all platforms and across all
asset classes. For most rms, this is an entirely new level of insight.
It is this type of intelligence that will enable them to become more agile
and strategic, by truly understanding performance within every
portfolio of activity. Thats going to lead to more ecient operations
and greater prots. The reality is that the days of siloed business
models are numbered and rms are thinking bigger and in times of
turmoil and high volatility, that could determine who sinks or swims.
Forward-thinking rms are already exploring ways to bring
timestamping to fruition sooner rather than later. Those that wait for the
regulatory deadline risk being left behind by those able to apply new
insights to powerful eect today.

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http://mm.gs/1Qmut5

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